jjbomber said:
Gazzip said:
You are right. The store will already own a soldering iron so they will trouser £42. Nothing wrong with that as everybody is entitled to earn a living.
Apart from that is £35 + VAT. Out of that net figure comes Income Tax and National Insurance or Corporation Tax. The shop is giving a service more than making a living.
I think we need to qualify that statement with a bit of maths. Based upon a charge of £48 for terminating a pair of cables, which was the dealer price as quoted by the OP:
If an employee is doing the work then PAYE and NI come off their basic salary, they are not on top, and the ENIC and pension contribution is all the employer would have to pay above and beyond that employee's salary. So if an employee on £12/h (£28K PA) is doing the work then his 15 minutes of his time will cost the dealer £3.00 + 13.8% ENICS = £3.41. Add 1% employers pension contribution and we are at £3.44. Add the cost of sales (materials) of say £4 for a dealer and you are at £7.44. Deduct that from the pre-VAT charge for the service of £40 (£48 - 20%) and the dealer has £32.56 in his hand. Then apply the rule of thirds to generate an overhead (premises, heating, advertising etc.) and we have a final, pre-corporation tax figure of £21.70. Apply 20% corporation tax and the dealer has £17.37 (£69.46 per hour) in his dividend pot for 15 minutes of sitting on his 'rse while somebody else did the work.
Now obvioulsy the dealer is not doing cable terminations at the rate of four an hour ad infinitum, so you cannot simply pro-rata £69.46/h up to an annual earning figure of £162,500 PA, but don't tell me he is only providing a service and not earning a living out of doing stuff like that. The notion is frankly laughable.
Now I need to work out how much my business lost in the time it took me to write all of the above. Where's my calculator...